Four Characteristics of Effective Innovation Systems

All innovation systems have three major components: a strategy comprising choices on where and how to create growth and value through innovation; a supporting set of processes for research and product development; and an enabling set of systems, tools, and capabilities. The best innovation systems share four important characteristics.

Speed. Organizing for speed may be the highest-impact step that companies can take to rejuvenate innovation. Time-consuming trials too often kill new products before they have a chance to find their market; bringing new products to market quickly avoids giving competitors early looks or the opportunity to influence trial results (by, for example, cutting the price of an existing product in trial markets). Splashy launches, supported by big advertising buys, are less essential today now that it’s possible to launch new products quickly by using social media and other inexpensive tools.

Learning. Failure is as integral to innovation as new ideas. Not every idea is going to make it. So, it's important to embrace failure—but to fail fast and fail cheap. Too often companies draw out the development and testing process, making failures time consuming and expensive. Failing fast and cheap is partly about making efficient use of scarce resources—by putting them where they are most likely to have an impact—and partly about capturing lessons learned to benefit future development teams.

Big Ideas. When it comes to innovation, too many companies suffer from a cautious culture, misguided incentives, and fearful decision-making and governance. As a result, they make incremental improvements to products rather than introducing a greater number of new and radical products. More companies need to add boldness to the mix. In the 2014 BCG Global Innovators Survey, 90% of the most disruptive innovators said that developing “new to the world” products is important to their future success, compared with 63% of nondisruptive innovators. They are also taking a longer-term view, with 25% investing for a three- to five-year return and 21% investing with a time horizon of five years or more.

IP Savvy.Innovation both depends on and generates intellectual property (IP). And it’s not just a tech thing. Smart companies across all industries increasingly use IP as both an offensive and a defensive competitive weapon—and disruptive innovators take it even more seriously. Companies that manage their IP assets strategically are more successful than their competitors at winning approval for their applications. They control a disproportionate share of the IP within their industries, measured not necessarily by raw numbers of applications and claims but by breadth and depth of coverage.

The Boston Consulting Group is an Equal Opportunity Employer. All qualified applicants will receive consideration for employment without regard to race, color, age,religion, sex, sexual orientation, gender identity / expression,national origin, protected veteran status, or any other characteristic protected under federal, state or local law,where applicable.

This website uses cookies to improve functionality and performance. If you continue browsing the site, you are giving implied consent to the use of cookies on this website. See our Cookie Policy for details.